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Murdoch-Owned Wireless Generation's Contract Should Be Scratched, Teachers' Union Leaders Write

Rupert Murdoch

First Posted: 08/05/11 01:38 PM ET Updated: 10/05/11 06:12 AM ET

NEW YORK -- New York should drop a $27 million contract with Wireless Generation, a Rupert Murdoch-owned student data tracking company, in light of News Corporation's alleged wrongdoings, teachers' union leaders wrote in a Thursday evening letter to state officials.

Wireless Generation, a software company that tracks student performance on tests, is an independent subsidiary of News Corporation, the parent company of the Wall Street Journal and the embattled News of the World.

"We have become increasingly concerned with the proposed contract," Michael Mulgrew and Richard Iannuzzi, who respectively head New York City's and the state's teachers' unions, wrote in the note.

The letter is addressed to New York State Board of Regents Chancellor Merryl Tisch, state Commissioner of Education John King, Jr., and copied to State Comptroller Tom DiNapoli.

"It is especially troubling that Wireless Generation will be tasked with creating a centralized student database for personal information even as its parent company, News Corporation, stands accused of engaging in illegal news gathering tactics, including the hacking of private voicemail accounts," the letter reads.

Murdoch acquired 90 percent of Wireless Generation for about $360 million last November. At the time of the acquisition, Murdoch said he saw K-12 education as a "$500 billion sector." Murdoch's first general move in the education sector had come just a few weeks earlier, when he tapped Joel Klein, then the chancellor of New York City's schools, to lead his education ventures.

The Wireless Generation contracts were approved while Klein still ran the district, leading to speculation about the chancellor's intentions.

"While he was chancellor of New York City, he [Klein] was funneling money to the work of this company, Wireless Generation," Mulgrew said in an interview. "Then Rupert Murdoch buys the company, and Joel Klein takes a job there. Something's not right."

Last month, The Huffington Post reported that New York City had approved its own $2.7 million no-bid contract with Wireless Generation -- the same week of Murdoch's testimony about News of the World's hacking scandal in England's Parliament. At the hearing, Klein, now Murdoch's internal investigator and confidante, sat behind the News Corp. head.

The city first rejected a smaller contract because, according to comptroller John Liu's spokesman Mike Loughran, the application package lacked some background information requested by a New Jersey attorney general. It was also missing a letter from Klein saying he recused himself to avoid a conflict of interest.

On Nov. 23, 2010, Klein recused himself from the district's Wireless Generation dealings -- two weeks after he had accepted Murdoch's job offer.

Earlier this week, the New York Daily News reported that more than 12 firms had shown interest in the $27 million contract the state awarded to Wireless Generation:

The Daily News has learned that the agency has explored the project for at least two years -- proof, critics say, state officials had ample time to competitively bid out the contract and still meet a fall 2012 deadline for a federal Race to the Top grant.

The contract is funded by federal Race to the Top money.

The report also revealed that Wireless Generation paid lobbyists $5,000 a month to win the state education agency's favor. The fate of that contract now lies with the state comptroller's office, which has until early September to award its final approval.

A spokesman from the comptroller's office previously told HuffPost that it routinely investigates the ethics of a subsidiary's parent company before signing off on any transaction.

"We stand by our selection of vendor for this work as outlined in the single-source document submitted to the State Comptroller," Tom Dunn, a spokesperson for the New York State Education Department, said in a statement Friday.

According to the unions' letter, parents and teachers have begun questioning the "wisdom of a News Corp.-owned company" having "access to the personal data of students all across New York." Beyond issues with News Corp., union leaders wrote that the contract itself is "under a cloud" because it did not go through the normal bidding process.

"We couldn't sit back and say nothing as we're about to hand over the personal information of 1.1 million students to a company embroiled in an international scandal alleging that they've been gathering personal information about people to use for their own means," Mulgrew said.

A Wireless Generation spokeswoman, Joan Lebow, said the company followed all appropriate procedures to secure the contract.

"Personal privacy IS of paramount concern and Wireless Generation, chosen because it is a leader in providing effective educational software that helps teachers and students in 50 states, follows the highest privacy standards and regulations in NY and nationwide," Lebow wrote in an email to The Huffington Post. "We do not share student data with News [Corp.] or its subsidiaries."

Mulgrew said another Wireless Generation contract is being considered by the city, and that he would "have something to say about that soon."

READ the unions' letter below:

NY Union Letter Against Wireless Generation Contract Approval


This article has been updated to include comment from the New York State Education Department and Wireless Generation.

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